Argo Blockchain – one of the largest and most powerful digital currency mining enterprises in the world – has announced a new plan that will allow it to avoid bankruptcy and become another company that falls victim to the ongoing bear conditions of the crypto arena.
Argo Blockchain Won’t Have to File Bankruptcy
Argo has agreed to sell its bitcoin mining facility (called Helios) for $65 million to Galaxy Digital, the hedge fund managed by Mike Novogratz, a billionaire investor and big-time fan of bitcoin and other forms of crypto. The wealth management firm will also provide Argo with a $35 million loan to help it restructure its operations. The loan was secured through a collateral package that came in the form of Argo mining equipment.
In a statement, Galaxy Digital explained:
The transaction will accelerate the expansion of Galaxy’s bitcoin mining operations and services, provide access to tax-efficient mining infrastructure, and reduce reliance on third-party hosting providers.
The crypto space has been extremely bearish over the past 12 months. So much so, that several digital currency companies and mining facilities have entered bankruptcy proceedings as they are unable to keep up with the rising energy prices of Joe Biden’s America. They also cannot contend with the ongoing price dips being experienced by bitcoin and other mainstream forms of digital currency.
Some of the big names that come to mind when discussing crypto bankruptcies include the Celsius Network, Voyager Digital, and Three Arrows Capital, the latter being a crypto hedge fund. However, it is Celsius that arguably got things going in this direction. It is also one of the largest crypto companies out there and likely received the most attention when it decided to enter court proceedings as a means of shielding itself from angry customers and lenders.
However, it can be argued that the bankruptcies of these companies are nothing compared with the one that is currently underway for FTX, one of the largest digital currency exchanges in the history of the space. FTX first came to fruition in 2019 and rose through the ranks very quickly. It became a top-five crypto exchange by 2021 and it seemed like everything was really going well for the company, though things came crashing down in November of 2022.
FTX Is the Biggest Bankruptcy Story
During that month, the company’s chief executive Sam Bankman-Fried announced FTX was enduring a liquidity crunch and needed fast cash. Initially, it looked like the larger crypto firm Binance was going to buy FTX out, though things didn’t quite turn out that way, and it wasn’t long before FTX became another bankrupt firm and SBF was resigning from his post.
At the time of writing, Argo has debts exceeding $41 million. Peter Wall – CEO of the firm – says he hopes this new deal will allow it to remain functional during the bear market.